Category Archives: Case Studies

Florida hotel financing showing random pier

Florida Hotel Financing

At GRP Capital, we know Florida hotel financing. In fact, we specialize in helping businesses thrive in the dynamic Florida hospitality market. While we are a national company with a track record of closing loans across the United States, our expertise in Florida’s hospitality sector sets us apart. We understand the unique nuances of this diverse market and are proud to support entrepreneurs pursuing success in Florida’s hospitality industry.

Recently, our client came to us, needing to refinance his independent hotel loan. His property was in the economy tier and the location was not in one of the highest density tourist areas. These Florida hospitality financing projects can be challenging to match up with lenders. But our team worked hard to place and close the loan.

Rick Patel, GRP Capital President, reflected on this loan and GRP Capital’s deep roots in the Florida hospitality marketplace.

“Our team has closed hundreds of Florida hospitality loans, making us a leader in the Florida hotel financing industry. Lenders acknowledge our expertise and turn to us, especially when financing atypical properties. This particular client wanted to move away from a seller note, as he wanted a traditional banking relationship. This is not unusual: seller notes and non-traditional lenders have their use. However, many clients want to migrate from a personal relationship with a lender. This property, although profitable, was independent and off the beaten path. We pursued financing with a lender who knew our team well and was willing to take on a slightly riskier loan.”

Florida Hotel Loan Basics:

• Florida is many markets. Florida is a large, populous state. As a result, the Florida hotel financing marketplace is varied. Some lenders prefer coastal properties, while others focus on inland or independent businesses. Understanding these preferences is crucial for securing financing.

• Insurance Requires Planning  The insurance landscape in Florida can be challenging. Many lenders require wind coverage, which can be costly. Collaborate with a trusted insurance agent. Obtain accurate quotes and ensure that your business plan accounts for all insurance costs.

• Seasonality Matters:  Florida properties often experience pronounced high and low seasons. Some hotels rely on large group events during slower periods. Research your property’s market drivers, such as major clients or recurrent events to develop a realistic revenue strategy.

Our GRP Capital team specializes in finding tailored financing solutions for every project.

Whether you’re purchasing, refinancing, or building from the ground up, our extensive network of lenders ensures you’ll find funding that aligns with your goals and cash flow needs.

Here’s how we add value:

  • We save you time by researching and identifying the best funding options for your unique project.
  • Our expertise spans various loan products—including SBA loans, bridge loans, and conventional financing—so you can navigate complex transactions confidently.
  • We provide guidance not only on lending but also on operational and strategic decisions that impact your business success.

If you’re considering becoming a first-time or repeat hotel owner in Florida or beyond, let’s discuss how we can help you achieve your business goals.

State Flag of Florida; we specialize in Florida hospitality

Capitalizing on Florida Hospitality with GRP Capital

At GRP Capital, we specialize in helping businesses thrive in the dynamic Florida hospitality market. While we are a national company with a track record of closing loans across the United States, our expertise in Florida’s hospitality sector sets us apart. We understand the unique nuances of this diverse market and are proud to support entrepreneurs pursuing success in Florida’s booming hospitality industry.

Recently, we had the privilege of assisting a client who was ready to make his mark in the Florida hospitality scene. With prior experience managing multi-family residential properties up north, he sought to transition into hotel ownership in Florida. His goal? To combine his operational expertise with his love for the Sunshine State.

Krishan Patel, GRP Capital Managing Director, reflected on the partnership:

“We love working with clients who bring strong skills from other industries and are eager to apply them to new ventures. This client was organized, well-capitalized, and determined. He had done his homework and was ready to embrace the challenges of entering a new business.”

The GRP Capital team guided him through the complexities of securing a hospitality loan. These included connecting him with a lender and a network of other professionals like surveyors and title officers was also helpful. Today he is successfully managing his independent East Coast hotel, just in time to profit from Florida’s high season.

Florida Hospitality Basics:

• Florida is many markets. Florida is a large, populous state. As a result, the marketplace is varied. Some lenders prefer coastal properties, while others focus on inland or independent businesses. Understanding these preferences is crucial for securing financing.

• Insurance Requires Planning  The insurance landscape in Florida can be challenging. Many lenders require wind coverage, which can be costly. Collaborate with a trusted insurance agent. Obtain accurate quotes and ensure that your business plan accounts for all insurance costs.

• Seasonality Matters:  Florida properties often experience pronounced high and low seasons. Some hotels rely on large group events during slower periods. Research your property’s market drivers, such as major clients or recurrent events to develop a realistic revenue strategy.

Our GRP Capital team specializes in finding tailored financing solutions for every project.

Whether you’re purchasing, refinancing, or building from the ground up, our extensive network of lenders ensures you’ll find funding that aligns with your goals and cash flow needs.

Here’s how we add value:

  • We save you time by researching and identifying the best funding options for your unique project.
  • Our expertise spans various loan products—including SBA loans, bridge loans, and conventional financing—so you can navigate complex transactions confidently.
  • We provide guidance not only on lending but also on operational and strategic decisions that impact your business success.

If you’re considering becoming a first-time or repeat hotel owner in Florida or beyond, let’s discuss how we can help you achieve your business goals.

Repeat Client Purchases Maine Hotel

Our client partners had their eyes on a Maine hotel. One of the partners is already experienced in the New England hospitality business. He even recently closed another hotel purchase with GRP Capital. He and his partner thought that this Maine hotel was just what they were after: a stable hotel that could quickly become more profitable.

The new hotel is located in a charming New England town with a nearby college.

Ryan Dumas, Senior Associate was very pleased to close this loan “I know one of the partners really well. He’s honest and a good business person. He has a vision to purchase New England properties, particularly those that can easily become more profitable. His business plan was strong and the lenders believed in the project. The partners have a clear and doable set of steps to increase the revenue of this hotel right away.”

Business Plan Basics and this Maine Hotel:

• Understand your hotel’s seasons as you take action: Many hotels are in locations that have seasonality. High season for a Maine hotel is different than the South Florida hospitality landscape. A strong business plan recognizes any seasonality and has a strategy for both high season and low season. This plan incorporates staffing, marketing and setting rates.

• Really understand the STR report of the property you are buying or refinancing. Smith Travel Reports or STR reporting gives you information not just about the property you are investigating. STR reports also show you that property’s position in the marketplace. You can compare this hotel to others nearby in terms of occupancy and daily rates. This is incredibly useful information for a potential buyer. You can use the STR numbers to set realistic goals and create a business plan that works towards those targets. If the hotel is not a STR subscriber, make sure that hotel statistics are accurate and complete.

• Highlight your previous positive experiences. This hotel owner had experience with underperforming properties. Therefore, the partners could quickly delineate the needed changes which would have an immediate impact on both revenues and expenses. If you have successfully operated this type of business or another business but in this marketplace, indicate that in your business plan. Explain how you have enhanced revenue or minimized surprise expenses in your previous business endeavors.

Why Choose GRP Capital?

Our GRP Capital team specializes in crafting financing solutions tailored to each client’s unique goals.

Whether you’re purchasing, refinancing, or building from the ground up, our extensive network of lenders ensures you’ll find funding that aligns with your goals and cash flow needs.

Here’s what sets us apart:

  • We save you time by researching and identifying the best funding options for your project.
  • Our expertise spans various loan products—including SBA loans, bridge loans, and conventional financing—so you can navigate even the most complex transactions confidently.
  • Beyond lending, we provide strategic guidance on operational decisions that drive long-term business success.

Collateral and a Central Florida Refinance

Collateral is an important part of many business loans. Your collateral “secures” your loan. It is the tangible “thing” that the bank knows has value.

Our Central Florida client was ready to refinance. Their business has been successful, with over a decade of stabilized income. The new loan was structured to free up capital for other business projects.

However, our client’s property, a waterfront hotel, consisted of multiple parcels. The hotel did not operate on every parcel, but they leased out other parcels, including a nearby boat dock. Even more significantly, their revenues included these lease payments.

Many lenders insist on including every single parcel in their loan, especially when those parcels are a revenue source. But including every single parcel in this collateral was not ideal. First of all, it would be complicated. Additional parcels mean additional title and survey work. And each parcel has to be appraised.

GRP Capital was able to work with our lender. We demonstrated that the hotel parcel alone had high value, enough to collateralize the loan. Working with our lender and building on the trust we had developed with them was crucial. It kept the loan as simple as possible and preserved our client’s collateral, too.

Collateral Basics:

• Your collateral will be appraised. An appraiser will determine the value of your collateral. This value has to meet or exceed the value of the loan.

• Collateral Shortfalls  Sometimes collateral values come up short. This happens. When it does, there are a few options. If this is an acquisition, the buyer may be able to renegotiate a discount on the sale price. Alternatively, borrowers can offer other assets as temporary collateral, while the loan is being paid down. Finally, some clients take out a small life insurance policy to obtain extra collateral.

• Consult experts before signing a PSA:  A PSA (Purchase Sale Agreement) makes assumptions about collateral. In addition, a PSA often requires “hard money”, a non-refundable amount. Therefore, if you can, contact GRP Capital prior to signing a PSA. We can save you money, especially if we believe the price is not going to be appraised to fully collateralize.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Refinance for cash out

Cash Out with a Refinance

Our client needed to pull cash out to upgrade their hospitality property but could not refinance due to the structure of their debt.

The amount they needed for their cash out was smaller than our typical loans. However, this was a repeat client who had approached us, seeking our counsel. Our management team looked carefully at all of their businesses and discovered a possibility. They owned an office building which was eligible for refinancing. There was even sufficient equity to pull out cash during the refinance.

Our client was pleased to close the loan and begin their upgrade.

GRP Capital is celebrating its tenth anniversary in 2024. This longevity has allowed to us to deepen our list of repeat customers. This benefits everybody.

Repeat Client Benefits:

• We know you! Our repeat clients are already “in the system”. We have their pertinent information, we understand the structures of their businesses, we even know who their team of professionals are. The “getting to know you” phase is already taken care of. We know what aspects of this process are easiest for you and your team and which present challenges at times. We are prepared for potential bumps in the road. Particularly with refinances and those with cash out components, this is critical.

• You Know Us!  Repeat clients know the “GRP Capital way”. You know how we match you with a lender, how we internally underwrite your file and how we process loans. There are no surprises as you already know how we communicate and the roles we have from business associates to credit analysis, from management to loan processing.

• We know your people:  If we have closed loans for you in the past, we may already have dealt with your attorney or your accountant. We already have emails for your insurance agent, your title agent and your franchise representative. Knowing how all of these professionals handle their business allows for seamless operations.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Cash out for refinance

Clients Buy South Carolina Hotel, Reflag as a Marriott Property

Ryan Dumas‘ clients came to him with a complex loan. First of all, they wanted to purchase a South Carolina hotel. But the seller would not be transferring the franchise to the buyers. Instead, he was taking his franchise flag to a new property that he was purchasing. Thus our buyers would need to reflag immediately upon taking possession.

One more thing: the equity injection money would be coming from the proceeds of a business sale, what is called a 1031 exchange. A 1031 exchange, also known as a like-kind exchange, is a real estate investing tool. It allows investors to swap out one investment property for another, deferring certain capital gains taxes.  Need more information on 1031 exchanges?

Our entire team worked closely with our client and the many moving parts of this loan. Ryan noted, “The buying partners know the local market well. The hotel they were looking at is well-located and poised to continue to be profitable. But having to reflag immediately added another layer of complication. The clients had to negotiate with Marriott, which has a very demanding vetting process of their franchisees. Ultimately, this property will function well as a Marriott property. Marriott has good brand awareness and loyal customers.”

Your To-Do List if Considering a Hotel Reflag:

• Work with your franchise representative. Go over the multiple aspects of the reflagging procedure with your franchise representative. Make sure you know the timeline, the expenses and the required PIP (property improvement plan). Determine what training the franchise will provide. Obtain details of the marketing support and front desk registration systems.

• Understand the multiple steps to reflag. Franchises have to approve your application. Only then can they begin to draft the franchise agreement. The franchises also publish a franchise disclosure document (FDD) which is updated every year. During the updating time, there is a blackout period. The blackout period can interfere with your closing timeline.

• Obtain detailed timelines of receiving the executed franchise agreement. Find out the exact date you can receive the draft of the franchise agreement. Then inquire as to when it can be executed. Some franchises hold an agreement in escrow and only release it upon the execution of the deed and/or warranty.

• Does your attorney need to get involved?:  Work with your attorney, if necessary, to review the franchise documents. There are also attorneys whom we can recommend, who specialize in negotiating with franchises.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Cash out for refinance

1031 Exchange for New Florida Hotel Owner

Our Florida client came to us with a 1031 exchange.

The client was getting ready to sell a Georgia property. They were using the proceeds to purchase a new hotel in central Florida. To minimize their tax exposure, they were utilizing a 1031 exchange.

A 1031 exchange, also known as a like-kind exchange, is a real estate investing tool. It allows investors to swap out one investment property for another, deferring certain capital gains taxes. 

Our entire team worked closely with our client, always mindful of the 1031 exchange deadline.  He is now the proud owner of his hotel. He is very skilled at increasing profitability and is ready to take on the challenges of his new property. Our client was appreciative of the availability of the entire GRP Capital team, even exclaiming, “You always are there for me. I appreciate what you are doing.”

Tips for Handling a 1031 Exchange Deadline:

• Secure specialized help. Be sure your attorney has experience with 1031 purchases and sales. In addition, be careful when choosing a title company for the sale of your property. Be sure they have the ability to hold the proceeds in escrow as you wait for the purchase to go through.

• Know your deadline. Many business owners have their eye on purchasing a new property. Sometimes, they plan to sell another asset for their equity injection. That is a great plan. However, make sure the loan is feasible, and that a lender can close the loan to meet your 1031 exchange deadline. The SBA (Small Business Administration) is still a great resource for hotel loans, but be aware that SBA loans take a bit longer to close, especially 504 loans.

• Get all of your own financial documents ready:  Lenders will require taxes to be filed (or extensions), as well as financials that are less than 90 days old. Work with your accountant and other professionals and let them know your 1031 exchange deadline.

• Make it legal:  Work with your attorney so that your borrowing entity has an operating agreement or bylaws, is registered in the correct state and can be licensed correctly. 

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Florida Gas Station Loan Closes

Senior Associate Ryan Dumas is pleased to announce the closing of a loan for a gas station in central Florida. The loan funded at 86% LTV (loan to value), including inventory costs. These were very favorable terms, and we are proud of this high leverage loan. In addition, the interest rates were extremely competitive.

This loan closed, despite two hurricanes coming through the area. Fortunately, neither one materially affected the gas station.

Ryan had this to say about the deal, “We had a great team collaborating on this deal. My client was working with an experienced gas station broker and also a very responsive attorney. We were able to quickly get the documents needed from the sellers and the buyer. Therefore, our lender was motivated, too. As a result, the lender quickly approved and scheduled the closing. I hope we can work with lots of these guys again, as they are bright, experienced business people.”

How to Set Yourself Up for a Quick Closing

• Organized Documents: Sellers and buyers need to have their vital documents in tip-top shape. If you think a business loan is coming down the pike, gather your materials. Create your own personal financial statement. Organize documents about businesses you own, like tax returns and financials. Contact your accountant and get up-to-date financials on all your businesses, even if it is not your practice to receive monthly financials.

•Engage Professionals: Consult with an attorney and your accountant before making business decisions. Call our GRP Capital Team before you even sign a PSA. Ask your advisers, “Can I afford this? What is a reasonable price? Do you think the timing is good now?”

• Get insurance in place now: The commercial property insurance marketplace is very volatile right now. Start the process of finding insurance immediately and figure out if you can afford the costs. As soon as you can, obtain insurance certificates. Insurance issues are one of the prime reasons for delayed closing. Waiting to purchase insurance until the last minute usually backfires.

•Be Flexible: If a quick closing is a priority, be ready to pivot. If an appraisal comes in short, buyers and sellers may have to renegotiate. Sometimes we have to tweak the structure of the loan, especially for SBA approval.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance, purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Gulf Coast of Florida

Useful Advice for Gulf Coast Hotel Purchase

Working closely with the GRP Capital Team, our recurring client purchased a new Gulf Coast hotel.

This purchase did have a few roadblocks, which sometimes happens!

The buyers put down hard money when they signed a Purchase Sale Agreement (PSA). However, during the underwriting process, the appraised value came up short.

Rick Patel, GRP President, stated, “Lenders and appraisers are cautious right now, especially in the hospitality arena. It can be tricky to negotiate with a seller when an appraised value is below their expectations. They can have a fixed idea of what they think their property is worth. In this instance, we worked closely with the borrowers and the broker to bring the PSA in line with the market value. This had to be done in order to close the loan. Getting to closing required tact and finesse.”

Advice for When Appraisals Come in Low

• Prevention first! GRP Capital works closely with borrowers to make sure the loan is appraised to show the full value. This sometimes means working with accountants to recategorize expenses. It also means combing financials to find addbacks. Addbacks are current costs will not be borne by the new buyer. Finally, we work closely with the appraisers to make sure they have a clear picture of the revenue potential of the property.

•Renegotiate Purchase Price: Ultimately, lenders will not loan money which exceeds the value of the property. It is also unrealistic, costly and time consuming to try to find another lender and hope that they will raise the appraised value. So, once a buyer has received a lower appraised value, they need to return to the seller to discuss the issue. Hopefully, the seller will be reasonable. It’s critical that the seller understands that a new buyer is not going to repair this problem. Indeed, a new purchase price is the only fix.

• Make Sound Business Decisions: A lower appraised value should cause the buyer to consider the project in a new light. Why have market values come up short? Can the buyer manage the property more profitably or will they face the same issues as the seller? And if the seller refuses to budge on price, a strong business owner has to know when to walk away.

More Information on the Appraisal Process

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance, purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Florida Refinance and Lower Payments

Our GRP Capital Team has closed a Florida hotel refinance, helping our client achieve more affordable, lower payments.

Originally, our client was paying over 11% interest on a previous loan. His new loan brought down the interest rate significantly. However, this was just one good part of the loan. Yes, this new loan includes more affordable monthly mortgage costs. But even better: GRP Capital was able to help structure the loan without our client incurring any fees, including SBA guaranty fees.

Finally, there was one other bonus to this loan. Like many of our hospitality clients, this hotel owner had an SBA Economic Injury Disaster Loan (EIDL). It was very important to our client to be able to retain this loan. The reason: the interest rates were so low and they were fixed. We worked with the lender and advocated on behalf of our client to retain and subordinate this EIDL. This meant that our client would continue making affordable monthly payments on the EIDL, without having to pay it down.

GRP Capital Managing Director Krishan Patel worked closely with the client’s family and our lender. Krishan states, “By closing on this loan, we lowered our client’s annual carrying cost. He is now better positioned for future growth plans. We hope to support him in his future endeavors. He’s setting achievable business goals. I expect him to continue to be profitable and to take on new projects in the near future.”

Refinancing for Lower Payments?

• Interest Rate: The interest rate is the most important component in monthly payments. An amortization schedule will clearly show what you can expect to pay.

•Costs of Refinancing: Knowing the true costs of refinancing is critical. Closing costs can add up. We will help you determine if they are affordable for you. It’s important to understand how long you need to hold a loan in order to make the refinance a good decision. How many months of lower payments will cover these possible costs?

• Handling Your EIDL: If you have an EIDL, this is a very affordable loan. We will advocate for our clients to be able to retain the EIDL per the loan agreement. Typically, we will arrange for our clients to subordinate the EIDL.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance, purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.